Hewlett-Packard allegations: Autonomy founder Mike Lynch tries to clear name

Three years ago, Mike Lynch was the founder of Britain's most successful software company, which was sold to the US computing giant Hewlett-Packard for a breathtaking $11bn (£6.6bn).

Today, he and Autonomy's finance director Sushovan Hussain are characterised by HP as the "architects" of a "massive fraud" that inflicted billions of dollars of harm on the company.

Two years after these allegations were first made, scant evidence to support them has emerged. The 750,000 pages of confidential documents HP has provided to government investigators in the US remain hidden from public view.

Lynch believes HP is avoiding disclosure, because no fraud took place and the company does not have the evidence to convince a jury. Recent events seem to point that way. HP has threatened on many occasions to sue Lynch and his management team, but has yet to take action.

Meanwhile, cases brought on the part of disgruntled shareholders have been settled using yet more HP cash. Some $57m was paid out to pension funds in March, and earlier this month two law firms agreed to drop their suit and switch sides, in exchange for $18m in fees. The avenues that could have forced HP to unlock its filing cabinets are being closed down.

On Thursday, Hussain was joined by another HP shareholder, Rod Cook, in trying to block the $18m settlement, on the grounds that one of the law firms involved was allegedly conflicted. Cotchett Pitre & McCarthy will be working for HP if the settlement is approved, but in a previous and unrelated case, it is already suing HP for deceptively marketing printer ink cartridges.

Lynch believes HP has no intention of taking him to court. But to clear his name, he needs a ruling from one of the regulators looking into the issue. He fears the investigations by the Serious Fraud Office in the UK, and the US Department of Justice and the Securities and Exchange Commission, will be left to peter out. The SFO began its probe in March 2013, but Lynch says he has not been interviewed by anyone there for over a year.

Meanwhile, lawyers on all sides are using legal privilege to sling mud. Lynch says it is not only his name that has been stained, but that of the British technology industry. Autonomy's accounting and marketing methods had attracted criticism before the HP acquisition, but Lynch was also a poster child for the achievements of Cambridge's Silicon Fen. The Autonomy affair casts a shadow, and a conclusion from the SFO is overdue.

Powered by Guardian.co.ukThis article was written by Juliette Garside, for The Guardian on Thursday 14th August 2014 16.05 Europe/London

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